Iain Duncan Smith: My hon. Friend is absolutely right. The figures are somewhat worse than that-the UK has a higher proportion of children growing up in workless households than almost any other EU country. We have had a very high level of residual unemployment for far too long. The key to dealing with that is the integrated work programme, which will look at ways of trying to get back into work some of those long-term unemployed-many of whom have been parked on incapacity benefit and forgotten about-and support those who have not been contacted. Something like 40% of unemployed people had not been contacted for over six years; no one had bothered even to speak to them. We will also try to reform the benefits system so that when someone can go to work they will straight away see that it is worth their while to do so, whereas at the moment work simply does not pay, or appears not to.

Frank Field: Does the Minister accept that the future jobs fund offered real opportunities for the young people who were drowning in the prospects of employers' refusal to give them work while at the same it provided the Government with their only genuine test of whether somebody really wanted to work? Why, therefore, is it being cut when no other Government programme will achieve both those objectives?

Chi Onwurah: The cuts to the future job fund are causing real concern in my constituency. From listening to Ministers this afternoon, I understand that the expectation is that these job losses will be replaced by a growing private sector. Can the Minister share with me the detailed analysis that the Government have undertaken that shows that these jobs will be created, when they will be created and that they will be created in the north-east?

Iain Duncan Smith: The cuts to the future job fund are not cuts. We have stuck to the contracted jobs already in existence, which will run until next year. We are talking about the notional jobs that might have been created but were not contracted for, so we are dealing with a game of vague figures. The best thing that we can do for the hon. Lady's constituents is to ensure that the cost of employing people does not rise, which was the plan of the previous Government in raising national insurance. Most of all, the 50,000 apprenticeships that we will create will provide long-term jobs for all her constituents.

David Cameron: With permission, Mr Speaker, I would like to make a statement on Afghanistan. First, I am sure that the whole House will want to join with me in paying tribute to Private Jonathan Monk from 2nd Battalion the Princess of Wales Royal Regiment and Lance Corporal Andrew Breeze from 1st Battalion the Mercian Regiment, who have both died in Afghanistan. Our thoughts and prayers are with their families and friends. Their service and sacrifice for our country must never be forgotten.
	It was my fifth visit to Afghanistan, but my first as Prime Minister. I held talks with President Karzai and visited our troops in Helmand. I want to set out for the House how this Government will approach our mission in Afghanistan, and how that mission is progressing, but first let me stress the importance of such updates. The whole nation is touched by the heroism of this generation of our armed forces, who are fighting to protect us in harsh conditions far from home, and I believe that the country, and this House, are entitled to the facts. That is why this statement will be the start of a pattern. There will be regular updates to the House, with quarterly statements by the Foreign Secretary or the Defence Secretary, and we will publish on a monthly basis much more information on the progress we are making. This will include updates on the security situation, on recruiting, training and retaining the Afghan security forces, on progress in appointing and supporting provincial and district governors, and on progress in development work, including health and education.
	Our main focus, however, will be on the security situation. For example, in the six months to March 2010, the Afghan national army grew by almost 20 %, with more than 17,000 people joining the ranks, but the Afghan police are assessed to be ineffective or barely able to operate in six of the 13 key provinces in General McChrystal's plan. Good news or bad, we want to take the country with us in what is this Government's top foreign policy priority.
	Let me address the first question that people are asking. Why are we in Afghanistan? I can answer in two words: national security. Our forces are in Afghanistan to prevent Afghan territory from again being used by al-Qaeda as a base from which to plan attacks on the UK or on our allies. Of course, the al-Qaeda training camps and the Taliban regime that protected them were removed from Afghanistan in the months after 9/11, and the presence of NATO forces prevents them from returning, but Afghanistan is not yet strong enough to look after its own security. That is why we are there, and with the help of the greater efforts of the Pakistanis to hunt down al-Qaeda in their own country, we are now placing al-Qaeda under pressure on both sides of the border. Eighteen months ago, the then Prime Minister told this House that some three quarters of the most serious terrorist plots against Britain had links to the border area. Today I am advised that the threat from al-Qaeda from Afghanistan and Pakistan has reduced, but I am also advised that if it were not for the current presence of UK and international coalition forces, al-Qaeda would return to Afghanistan and the threat to the UK would rise.
	The next question is how long must we stay. The Afghan people do not want foreign forces on their soil any longer than necessary, and the British people are rightly impatient for progress. Our forces will not remain in Afghanistan a day longer than is necessary, and I want to bring them home the moment it is safe to do so. The key to success is training and equipping the Afghan security forces at every level to take on the task of securing their country, so that Afghans can chart their own way in the world without their country posing a threat to others, and our forces can come home, the job done, their heads held high.
	That is why we back the strategy developed by General McChrystal, commander of the international security assistance force, and endorsed by President Obama and NATO. That strategy involves protecting the civilian population from the insurgents, supporting more effective government at every level, and building up the Afghan national security forces as rapidly as is feasible. We want to transfer security responsibility for districts and provinces to Afghan control as soon as they are ready, but that must be done on the basis of the facts on the ground, not a pre-announced timetable.
	The current year is the vital year. We are six months into an 18-month military surge, and we must now redouble our efforts to drive progress. Central Helmand has, along with Kandahar, been the heartland of the Taliban. It is from there that they gave safe haven to the al-Qaeda network in Afghanistan. That is why the operation in central Helmand is crucial to the success of the whole mission. Four years ago, we went into Helmand with 3,000 troops. I do not think anyone now seriously argues that that was sufficient. Today, there are around 30,000 troops there, with 8,000 British working alongside 20,000 US Marines. In total, we have more than 10,000 troops in the country as a whole. With the arrival of reinforcements and the continued growth of the Afghan security forces, we are now evening out the ISAF presence in the main populated areas in Helmand.
	That is an absolutely crucial point. In the past, we have simply not had enough soldiers per head of population for an effective counter-insurgency campaign. Today, although the rebalancing is still work in progress, the situation is much improved. The arrival of a US Marine expeditionary force, combined with additional contributions from other ISAF partners including the UK, has given a huge boost to the resources available to ISAF in Helmand. For example, the Marines have arrived with some 80 aircraft and helicopters of their own, which are now available to support all ISAF forces in Helmand.
	It is clear that we have made real progress in central Helmand this year. A degree of normal life has returned to places such as Nad Ali, where the bazaar is open again and people are going about their daily business in an area that was until recently completely infested with insurgents, but the progress is not yet irreversible. Inevitably, there will be tough fighting as Afghan forces, with ISAF support, hold the ground we have taken and push the insurgents out of further towns and villages.
	During my visit, I was able to announce a further £67 million to double the number of counter-improvised explosive device teams, to tackle the most serious threat facing our young men and women. So with the improvements made in the past year, many of the acute shortages that hampered us so severely in our initial deployment in Helmand have been dealt with, but I do not pretend that every equipment shortage has been resolved. We will need to adapt constantly and deal with problems as they arise.
	The whole country is incredibly proud of our armed forces, and I believe we need to do more to recognise these remarkable men and women and place them at the front and centre of our society. That is why I announced a doubling of the operational allowance for service in Afghanistan, backdated to 6 May; and that is why I believe it is right that we renew and reaffirm our commitment to the military covenant, that crucial contract between our country and those who risk their lives to ensure our security.
	I do not pretend that we can succeed, either in Helmand or in Afghanistan, by military means alone. Insurgencies usually end with political settlements, not military victories, and that is why I have always said that we need a political surge to accompany the military one. We need better to align our development spending with our overall strategy, and I have announced £200 million to be spent on training, strengthening the police services and government institutions; and, crucially, we need a political process to help bring the insurgency to an end.
	As a first step, that means getting individual Taliban fighters to put down their weapons, renounce violence and reintegrate into Afghan society, and the successful peace jirga earlier this month should enable that process to move ahead more swiftly. However, it means more than that. For there to be long-term political stability, everyone in Afghanistan, including those in the south, must feel that the Government is theirs, that it is their country, and that they have a role to play. As I agreed with President Karzai, we must start working towards a wider reconciliation process, leading to a political settlement that works for all the peoples of Afghanistan.
	We are seeing a good example of that in Kandahar where, importantly, the process getting under way is largely Afghan-led. Alongside military operations by Afghan security forces together with international forces, it includes, for example, the shura of several hundred local elders conducted yesterday by the local governor, which President Karzai attended, and a major drive by the Afghan Government, with our support, to improve public services and the rule of law. From now on, what is happening around Kandahar and in Helmand should reflect a deeper understanding of the influence of tribal structures in Afghanistan. In the past, we simply have not paid enough attention to that and to the unintended consequences of some of our policies. I want us, for example, to take a careful look at the contracting policy of ISAF, to ensure that the money going into the local economy from the huge contracts that are let has a positive impact and does not help fund local militias or, even worse, the insurgents.
	This is the vital year. We have the forces needed on the ground and we have our very best people, not just those in the military, but those leading on the diplomatic and development front. I do not pretend that it will be easy and I must warn the House that we must be ready for further casualties over the summer months, as the so called "fighting season" resumes and as ISAF extends its activity. But I say to the House what I said to our young servicemen and women in the dust and heat of Helmand on Friday: they are fighting thousands of miles away to protect our national security here at home. Like their predecessors, they have the support and gratitude of the whole nation. When we have succeeded in enabling the Afghans to take control of their own security our troops can begin to come home. Even after our troops have left Afghanistan, the relationship between Britain and Afghanistan must continue as a strong and close one. Likewise, we want to continue to build on our relationship with Pakistan. These long-term relationships are, quite simply, essential for our national security. I commend this statement to the House.

David Cameron: I thank the right hon. and learned Lady for her response-both for what she said and the way in which she said it. I know that we will have our differences across these Dispatch Boxes, but on the issue of Afghanistan there is great unity on the Labour and coalition Benches- [Interruption.] Well done; well spotted. That is important, because our troops like to know that everyone in the House is behind what they are doing.
	On the specific questions that she asked, Armed Forces day will go ahead as planned on 26 June. She asked about the £67 million spent on countering the IED threat and whether it is in addition to the patrol vehicles that are already on order. Yes; I can confirm that it is. She asked about the strategy generally and what has changed. What I would say-I note what the Foreign Secretary said in his speech on the Queen's Speech-is that we are six months into the McChrystal-Obama strategy of the military and political surge and we want to see that strategy through, so there is continuity in that regard. We must be absolutely clear in our focus on the national security perspective of what we are doing. That is not to say that development work and the building of schools, hospitals and other things are not important-it is just to get our priorities straight. In the end, our route home and our route to a successful Afghanistan is to put security first. That needs to be very clear. On the question about development aid, the £200 million is additional to the existing work we are doing in Afghanistan.
	I very much agree with what the right hon. and learned Lady said about backing the wives, partners and families of all those who serve in our armed forces. In recent years, we have put enormous pressure on those families and we need to do more to help them. I have RAF Brize Norton in my constituency and I know the very severe pressures that we put on people. In all the issues around military families-whether it is about the schools their children go to, the health centres they use or time for leave-we want to do more to help, and we are going to give real focus to that.
	The right hon. and learned Lady asked about the strategic defence review and whether it would cover the size of the Army. Of course, it will cover all of the issues in defence. Finally, she quite rightly paid tribute to Sir Jock Stirrup and Bill Jeffrey, and I join her in paying tribute to them. They both have been, and are, extremely strong and dedicated public servants, and everyone in this country owes them that thank you. Sir Jock Stirrup, as the right hon. and learned Lady knows, before the election actually extended his time as Chief of the Defence Staff because he wanted to see continuity-he wanted to see that service continue-and I was very pleased that that happened. For some time he has had in mind standing down in the autumn, at the end of the strategic defence review-at the end of October-and that is indeed what he is going to do, and what Bill Jeffrey is going to do. That will give the new Government time to put in place a proper transition for a new Chief of the Defence Staff to take on the vital work that Sir Jock has done. Let me say again that he has done a superb job as Chief of the Defence Staff. I am working with him extremely well. He came with me on the trip to Afghanistan, and he deserves the gratitude of the House of Commons.

James Arbuthnot: Does my right hon. Friend agree that there is a risk of conflicting messages? We are saying on the one hand to the Taliban that we will not cut and run and that we will stay for as long as is needed to do the job, but on the other hand we are saying to the Afghan Government that there is urgency for them to sort out their corruption and their governance. Does my right hon. Friend give priority to leaving as soon as possible or staying for as long as is necessary?

David Cameron: My hon. Friend takes a great interest in these matters. We have put Whitehall on much more of a war footing, not least by appointing a national security council and a national security adviser, who met on day one of the new Government. That is a difference, and it is driving the policy. That message has got through clearly to the Ministry of Defence. Obviously, there are sometimes time lags in getting equipment out to the front line, but we are doing everything we can to make sure that that happens and that the commitment is there.

David Cameron: I discussed with President Karzai the resignation of the two Ministers, to which my hon. Friend referred, and the prospects for political settlement and for reintegration. That, combined with the military surge, will be vital to securing the future of Afghanistan and enabling us to bring our troops back home. In the end, particularly in southern Afghanistan, people must feel that they are part of the Government, and that it represents them. That process of reintegration, with the red lines that have been laid down, is a vital part of making this country more secure.

Alistair Darling: I thank the Chancellor for his statement. My thanks would be more heartfelt had I not received it just 25 minutes ago. There was a time when statements were supposed to be in the hands of the Opposition an hour before the statement was made, and then 45 minutes. I do accept, before the Chancellor says it, that in my time there were occasions when he did not get as much notice as he wanted. All I would say, in the nicest possible way and in the spirit of consensus, is that if we could try to get these statements in the Opposition's hands rather earlier, that would be very helpful.
	Turning to the substance of the Chancellor's statement, I welcome the measured approach taken by Sir Alan Budd, and his colleagues in the Office for Budget Responsibility, in presenting his report this morning. Higher borrowing by the Government, as the OBR acknowledges today, continues to support the economy. Indeed, without it, there was a grave risk that a recession could have tipped into a depression; that is why the expenditure was necessary in this country and in other countries across the world. However, as I have said repeatedly, borrowing needs to come down as the economic recovery is established. Has not the OBR forecast that borrowing will be £30 billion lower than I anticipated in my Budget, and does not that flatly contradict what the Prime Minister said last week when he said that
	"the overall scale of the problem is even worse than we thought"?
	Does not the report say that borrowing is lower not just this year, for which the OBR forecasts borrowing at £8 billion lower than I did, but in each and every one of the next five years? Borrowing is down by more than £30 billion in total. Can the Chancellor confirm whether he and the Prime Minister knew what the OBR's borrowing forecasts were prior to the Prime Minister making his speech last Monday? If he did not, he was just plain wrong; if he did, he owes us an apology. At the election, the Chancellor and the Prime Minister said that they had no need to raise VAT. Now that borrowing is in fact lower than they thought, is that still their policy?
	Turning to growth, the OBR has confirmed my forecast for this year, but it has set out a lower growth forecast for future years-just 2.6% next year. This change is driven partly by what Sir Alan has today labelled "recent events", particularly events in Europe, where growth is sluggish at best. Is it not the case that what is happening in Europe, our largest export market, will impact on growth here in the UK? Does not that reinforce the need to put in place measures to secure growth here and in other countries in Europe? Does not the Chancellor agree that the impact of action taken across Europe to reduce deficits runs the risk of depressing demand and setting back the recovery unless accompanied by measures to stimulate growth? Does he not accept that growth is essential to cut borrowing? Japan provides an example of what happens if one gets this wrong-recovery is choked off, growth becomes stagnant, and debt rises.
	It was because the private sector was weak as the global crisis hit that the public sector stepped in to support our economy. Sir Alan Budd and his colleagues understand that point, because Sir Alan says in his report, at paragraph 3.20:
	"Private sector demand contracted sharply in the recession, while government spending contributed positively to GDP growth."
	So much for the claim that our spending was irresponsible and unnecessary. In the same paragraph, he goes on to say:
	"For this year"-
	2010-
	"it is government consumption and inventory accumulation that make the largest contribution to growth."
	In other words, without it there would not have been growth this year. The risk of taking large sums out of the economy is that the recovery will be derailed. Is it not also the case that confidence is being affected by the scaremongering that we see from the Prime Minister and the Chancellor? The Chancellor will have noticed the survey of business confidence this morning showing a reduction in business confidence. That shows that what he is saying is, unfortunately, having a very real impact on the economy.
	The Chancellor asked us to focus on the structural deficit. However, he will have read Sir Alan's very clear statement, at paragraph 4.40 of the report, that
	"forecasts of cyclically-adjusted aggregates are subject to particular uncertainty."
	In other words, there is a great deal of uncertainty about what the structural deficit is. But if the Chancellor does take the estimate of structural borrowing from today's forecasts as the barometer of success, he needs to be clear with people what that means.
	Will he confirm that it is still his policy to remove the entire structural deficit over this Parliament? If so, will he confirm that, on the numbers published today, he would need to find £118 billion by 2014-15? That is £118 billion of spending cuts, tax rises or both, which will affect millions of people and businesses in this country.
	Since the Budget, there has been slightly faster growth at the beginning of this year. There is lower borrowing as tax receipts have come in higher than previously thought. Far from providing political cover for the Conservatives and Liberal Democrats for cuts and tax rises next week, does not the report remind us that growth is still fragile, the recovery is not yet secured and growth is essential, not only to cut borrowing but to secure jobs and a lasting recovery?

Michael Meacher: If the Chancellor accepts Sir Alan Budd's estimate that around three quarters of the current deficit-about £120 billion-is structural, and if he intends to eradicate that entirely during this Parliament through public spending cuts and tax increases, where does he expect the growth to come from to prevent unemployment increasing to 3 million and staying there for the next five years?

Stewart Hosie: I thank the Chancellor for his statement and the early advance sight of it. That is different to what happened under the previous Government, when such statements tended to come in very late indeed.
	There is no doubt that the OBR forecasts show that the previous growth forecasts were too high and the deficit forecast, which is now £155 billion, was also too high. Will the Chancellor reflect that that is not simply a green light to tax and cut more, but that it demonstrates the imperative for sustained and sustainable above-trend growth, which is the real solution to tackling the structural deficit?

Richard Harrington: The complacency of the former Chancellor of the Exchequer about the small reduction in the expected budget deficit is rather like me saying that I am losing weight because I missed breakfast. We want clear, credible plans to deal with the budget deficit, and we need to know what they are as soon as possible.

Ivan Lewis: I agree with my hon. Friend in the sense that as long as that remains Hamas's position, it is inconceivable that it will be drawn into any credible peace process. The criteria that the Quartet has laid down-recognition of Israel, a denunciation of violence and a respect for previous agreements-are clear. Of course, there is engagement with Hamas through, for example, the Arab League and Egypt, so there is an opportunity for countries and institutions to have discussions with it. However, the international community is clear about the criteria that need to apply for Hamas to join the political process.
	As I said, we want to see direct negotiations begin as a matter of urgency. It is important that no preconditions should be imposed by either side in advance. However, it is also true that confidence-building measures would help to create a level of trust that, frankly, is currently in very short supply. I want to identify what those measures should be-they are not preconditions but ways to create the right environment for the rebuilding of some relationship of trust and mutual respect. As my right hon. Friend the shadow Foreign Secretary has consistently made clear, Israel should freeze all settlement expansion. Not only are settlements illegal but their expansion changes the facts on the ground, jeopardising the prospect of a contiguous Palestinian state as well as provoking anger and mistrust. We should galvanise international support for Prime Minister Fayyad's 2-year economic plan towards Palestinian statehood. I am proud that in government we pledged £210 million in aid, and I hope that over the three-year period that commitment will be maintained by the new Government.
	The blockade of Gaza must end so that all necessary humanitarian and reconstruction assistance can get through. However, in line with resolution 1860, this will happen only is there is tangible action to prevent the trafficking of weapons and weapons parts into Gaza. To that end, we welcome Tony Blair's efforts to secure progress, which-as I am sure all hon. Members accept-is now urgent. We want to see the Quartet and the Arab League working with all parties to come up with a credible plan that meets these two objectives within weeks, not months. Rocket attacks on Israel must stop. Gilad Shalit should be released by Hamas without precondition. His capture and continued detention are unacceptable.
	With regard to recent events off the coast of Gaza, all sides have rightly condemned the tragic loss of life. We welcome today's inquiry announced by Israel and the involvement of David Trimble and Ken Watkin. However, we will be watching closely to ensure that the tests of independence and transparency that we have set are met in the way in which the inquiry is conducted.
	The message that we should send from the House today is that the clock is ticking and time is running out for peace and stability in the middle east. A lack of political progress will not sustain an uneasy calm, but will lead to a resumption of violence and the strengthening of those whose purpose and interest are served by perpetual conflict. It is true that political leaders should be wary of getting too far ahead of their electorate, but it is equally true that history teaches us that great leaders are willing to deliver difficult messages to their own people.
	The time has come for Prime Minister Netanyahu and President Abbas to prove their critics wrong. Prime Minister Netanyahu needs to show that he truly understands and believes that there is no viable alternative to a just two-state solution and President Abbas needs to show the strength and credibility to deliver the Palestinian state which is long overdue.
	Two states for two peoples will not bring to an end to al-Qaeda's fundamentalist terrorism or bring the Iranian regime from the margins to the mainstream. Al-Qaeda's support for the Palestinians is a tactic, not the pursuit of a just cause. But two states would undermine their selective narrative about the west's foreign policy goals, weaken their recruitment tools and strengthen the voice and hand of the mainstream majority in the Muslim world who deplore both violence and the politicisation of faith.
	On Iran, we on this side of the House strongly support the new package of sanctions agreed by the United Nations Security Council last week. We reiterate our hope that Iran will chose the path of dialogue and diplomacy. Iran is a proud country which would have an important and influential role if it chose to rejoin the mainstream of the international community, but the regime must understand that the world will not stand by as it develops a nuclear weapons programme in clear contravention of its non-proliferation treaty obligations. That is not only because of the direct threat to Israel and the Arab states, but because a nuclear Iran would almost certainly trigger a new nuclear arms race, with some Arab states feeling an obligation to develop their own nuclear programme. That would be catastrophic at a time when the recent NPT review conference sought to take some tentative steps towards a world free of nuclear weapons.
	As the Minister said, the people of Iran are courageous, as they demonstrated through their peaceful post-election protests. They should know that Britain seeks to be a friend of Iran and wants to resolve our differences though negotiation. Equally, the regime should know that, with our international partners, we will remain unwavering in our determination to prevent it developing nuclear weapons and in our revulsion at its President's holocaust denial.
	Irrespective of different views on the war in Iraq, we should always remember the brave British servicemen and women who risked and in some cases sacrificed their lives freeing Iraq from the tyranny of Saddam Hussein. Just before Christmas last year, I was privileged to visit Iraq and see for myself the excellent work being done by our Royal Navy in training the Iraqi navy to protect its coastal waters. Significant progress has been made in Iraq but the new Iraqi Government must seek maximum consensus to consolidate security, improve the effectiveness of Government and push forward with economic and social reform. They should seek to improve human rights, including for minorities, women and trade unionists. Britain has a duty to play a positive role in the development of a new Iraq, and it is important that the British Government work with the Iraqis to identify how we can add the most value and make the most difference on a sustainable basis.

Stephen Williams: May I begin by saying that it is nice to see you in your new place, Mr Deputy Speaker?
	The Minister and his Labour shadow made wide-ranging speeches about the nature of the various problems in the middle east. I want to confine my remarks to the situation in Palestine, and particularly in Gaza, as did the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman). That is not just because of the events that we all witnessed on our TV screens a couple of weekends ago, and which were discussed by colleagues at a Liberal International meeting in Berlin this weekend. My speech has also been informed by my visit to Gaza in March as part of a cross-party delegation led by my noble Friend, Lord David Steel. The hon. Members for Hammersmith (Mr Slaughter) and for Westminster North (Ms Buck) were also part of the delegation. For me, that visit to Gaza was one of those life-transforming experiences that crystallised the issues in my head and made me see them more clearly than I had done before.
	In Gaza, 1.5 million people are being held under siege conditions. First, they are blockaded on land. We saw the wall and, more pertinently, we had to be careful not to get too close to it because of the snipers who patrol it. The people are also blockaded by air, as well as by sea, the tragic result of which we saw a couple of weekends ago. To set this in the context of my own constituency, that is the equivalent of the whole of greater Bristol, Bath and all of Wiltshire being blockaded off from the rest of the United Kingdom and denied access to the most basic goods. This is a humanitarian violation on a quite staggering scale.
	There are limited crossing points along the well-policed border. The Rafah crossing from Egypt, which we had to use, is only for foot passengers. No goods are allowed to pass through it. All the crossing points through which goods may be transmitted are controlled by the Israeli army. As we saw, only a limited variety of items are allowed to be transferred across, and the list, which seems quite arbitrary, changes from week to week. When we were there in early March, only 70 items were allowed across the border. If we go into our local corner shop-never mind the supermarket-we can see the thousands of products, including hundreds of different kinds of biscuits and confectionery alone, that are available to us. Imagine being limited to only 70 items in total out of the full range of goods and services that we, as 21st-century citizens, expect to have access to. However, only 70 items were allowed into Gaza in that particular week. This is not just the denial of humanitarian aid; it is the denial, and complete obstruction and destruction, of a fully functioning market economy.
	Desperately needed reconstruction materials are not allowed to be transferred across the border either, and in Gaza we saw, of course, the bombed-out schools, the bombed university and hospital, and the housing shortages. It is absurd and outrageous that cement and other construction materials are not allowed across the border.
	All of that leads to those 1.5 million people effectively being utterly dependent on a shadow, black-market economy supplied with goods through tunnels dug through the sand from Egypt and controlled by local criminals and Hamas. People with sufficient money and wherewithal can access those goods, whereas the rest are dependent on local patronage or the United Nations Relief and Works Agency.
	What we saw in Gaza is effectively a parallel society. Ironically, people who can prove their status as a descendant of a 1948 refugee are in a slightly better position than those who have lived in the Gaza strip for generations, because they might get access to UNRWA food parcels. We saw that at a food distribution centre, where families came from all over the Gaza strip and took away their very limited supplies of cooking oil and other cooking materials by donkey cart. It was a medieval scene, and what is happening in Gaza is medieval, too: medieval siege tactics are being used that would have been appropriate at the time of Richard the Lionheart or Saladin but are completely outrageous and unacceptable in the second decade of the 21st century.
	My remarks so far have provided an outline of the problem as I saw it for myself just a few months ago, but what can we do about it? The UK Government should use our membership of the European Union to be more active in putting pressure on the state of Israel, and also on Egypt. The objective should be to lift the siege, and not only for humanitarian aid; indeed, I am a little worried about the frequent references to humanitarian aid. The full range of goods and services that we take for granted in our society should be allowed in. That is needed in Gaza to allow people to rebuild a fully functioning market economy.
	The EU is in a good position to apply leverage on the state of Israel through our trade agreements with it. The EU can also potentially play an important role in enabling access to goods and services for Gaza. While travelling into Westminster on the train today, I was intrigued by an article in  The Times by the EU's foreign affairs High Representative, Cathy Ashton, whom I believe is at this very moment chairing a meeting of all EU Foreign Ministers. The article said that the EU could perhaps be the agency that facilitates and polices the transfer of goods and services into the Gaza strip, and that instead of Israel banning all goods and services, we should have a list that prohibits only those few of them that would be prejudicial to Israel's security, and that the presumption should be that all other goods should be allowed in.

Stephen Williams: I am certainly not going to deny that part of what is taking place is self-inflicted. Obviously, the rocket attacks on villages in the south of Israel are outrageous, and we made it clear in the meetings we had with various political representatives in Gaza that there had been wrong on both sides, but the state of Israel has an army at its disposal, whereas the inhabitants of Gaza are 1.5 million people who are at the mercy of a superpower on their doorstep, and those superpowers, whether Israel or Egypt-or the states that, perhaps, control and influence their foreign policy from much further afield-are, effectively, playing with the destinies of men, women and children, as the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) mentioned. That is not the way to build peace and understanding for the future, and I think we have a right to expect rather more from the democratic state of Israel than it has shown so far. That leads me to my final point.

Louise Ellman: I, too, congratulate you on your very well deserved position, Mr Deputy Speaker.
	The death of nine people on the Mavi Marmara on 31 May has brought widespread outrage. It is the latest incident to highlight the tragic conflict between Jewish and Palestinian nationalism, which will be resolved only by a negotiated, comprehensive peace settlement that establishes two states-Israel and Palestine-living side by side in peace and security. I am very pleased that inquiries into the incident have now been set up. We will have to await the results of those inquiries to get the full picture, but this afternoon I want to refer to some of the facts that are already known-indeed, they are clearly evident.
	The blockade of Gaza came about because Gaza had been run by the Islamist Hamas after Israel dismantled its settlements, ended the occupation of Gaza and withdrew 8,000 settlers and its soldiers. Instead of that being followed by an attempt to build a peaceful society, it was followed by Hamas overthrowing Fatah and establishing a regime set on eliminating Israel. Hamas's ideology is very clear-it is set out in its charter and by the continuing statements of its leaders. Hamas sees it as a religious duty to destroy the state of Israel and it promotes the death cult. It says:
	"The Day of Judgement will not come about until Muslims fight the Jews (killing the Jews)".
	That is in article 7 of its charter. It also invokes the protocols of the elders of Zion-the false allegations that there is a Jewish conspiracy to run the world.
	Hamas's position is not just to do with ideology and rhetoric; it is to do with action as well. It has fired about 11,000 rockets and missiles-directed at Israeli civilians-and now it is receiving weapons from Iran that Israelis fear could reach Tel Aviv. It was only last November that a shipment of more than 500 tonnes of Iranian weapons coming to Gaza was intercepted off the coast of Cyprus. So Israel has every reason to be concerned about the Hamas regime continuing to attack Israeli civilians and working continually with Iran, its backer, which is dedicated to the absolute destruction and annihilation of the state of Israel and its people. Israel has every reason to be concerned about that.
	There is also every reason to be concerned about what is happening to civilians and citizens in Gaza, many of whom are not involved with Hamas. That can and has to be addressed in the long term by a proper peace agreement, but in the short term it could and should be addressed by the European Union, Egypt and the Palestinian Authority taking their part in ensuring that goods that do and should come into Gaza do not include weapons of destruction. That responsibility had been taken up in the past, but has now gone. It should be resumed, and I hope that today's announcement will facilitate the easing of that blockade and will allow the needs of the people of Gaza to be met without threatening the citizens of Israel.
	I want to ask several questions about the incident with the flotilla to Gaza. Six vessels set out to take humanitarian aid to Gaza, from five of which aid was landed at Ashdod as the Israelis requested. Most unfortunately, Hamas then refused to allow that aid to be taken into Gaza. The incident and the regrettable deaths happened on the sixth vessel, so what was different about it? Who was on it? Were the peace activists who most certainly were on the other vessels infiltrated by others with sinister motives? What was the role of the IHH-the Turkish-Islamic organisation that is linked, through the Union of Good, to Hamas and jihadists and even to al-Qaeda-which was involved in promoting the flotilla? When the Israelis asked that No. 6 vessel dock in Ashdod to unload its humanitarian load, a reply came back, which was recorded, "Go back to Auschwitz." What was going on on that specific vessel?
	The Turkish press have been making a number of interesting reports in the past few days, including interviews with the families of some of the people in the flotilla who died. Those families have spoken about their partners wanting to be martyrs. We saw Hamas flags draped over the coffins of the dead and we have seen videos of the Israeli paratroopers on those ships being attacked with metal pipes and knives and being dragged downstairs in attempts to lynch them. Reuters has issued an apology for clipping from photographs scenes showing weapons being held by activists on that ship. Were they all peace activists? I have no doubt that most of the people who set out for Gaza genuinely want peace, but there was something else going on on that No. 6 vessel-something that we need to know a lot more about.

Emma Reynolds: Thank you for calling me to speak, Mr. Deputy Speaker. I congratulate you on your new position.
	Like many colleagues on both sides of the House, I shall concentrate my remarks on the situation in Israel. I visited Israel and the west bank last year and met politicians from both sides. The best and most hopeful meetings were those with politicians with moderate views, who were willing to make compromises and could see the conflict from the perspective of the other side. In that vein, I welcome the comments of my hon. Friend the Member for Bury South (Mr Lewis), who said that there is no contradiction between being a friend of Israel and a friend of the Palestinians, supporting a viable two-state solution.
	During my visit, I was struck by the range and depth of those agreements, and I ask the Government how they will strengthen the voices of those moderates. Recent events filled me with great pessimism. The horrific incident on the Mavi Marmara sent a shock wave around the world, with widespread condemnation of the deaths of the nine civilians. The inquiry into the incident-I believe there should be an inquiry-must be judged by the international community as comprehensive, impartial and independent. Anything that falls short of those criteria will not be credible. I do not want to prejudge the conclusions of the inquiry, but questions about the conduct of soldiers aboard the ship must be complemented by searching questions about the planning of the military operation.
	There must also be a wider understanding by the Israeli Government and the Israeli defence forces that they cannot use the justification of self-defence for any action that they choose to take. They must understand that there are severe doubts about the proportionality of their response in this case and others, and that the blockade of Gaza, in the wise words of my right hon. Friend the shadow Foreign Secretary, is self-defeating-a policy that has long been discredited and continues to push power into the hands of Hamas.
	The people of Gaza are, in effect, faced with collective punishment, which in turn produces bitterness and resentment and pushes them further into the arms of Hamas, thereby frustrating the efforts of the more moderate voices that I mentioned. Allowing Hamas to control supplies of many of the goods that are smuggled illegally has strengthened its hand, not weakened it. The basic human rights of the people of Gaza have been denied for too long. The economy of Gaza is in ruins, with an unemployment rate of nearly 40%. Any hope of sustaining economic growth through exports is strangled at birth by the blockade. Not being able to export from Gaza has given more power and control to Hamas.
	The restrictions and the poverty that they engender leave the people of Gaza without hope and drive them into the waiting arms of Hamas, whose only counsel is a path of confrontation and an endless cycle of violence and revenge. I welcome the work that the middle east envoy, Tony Blair, is doing to ensure that supplies will, we hope, go into Gaza, that the security concerns of the Israelis are respected and that weapons are not allowed into Gaza.
	The proactive stance of the Obama Administration and its insistence that the Israeli Government should halt settlement construction is welcome. For too long the Bush Administration inflamed rather than helped the situation. Israel needs critical, not uncritical, friends. I urge the Government to do everything they can to strengthen the voices of moderation on both sides of this tragic conflict. Despite all that has happened, there are such voices, and our Government should put pressure on the Israeli Government, through the Quartet or bilaterally, to extend the freeze on settlement building beyond September.
	The talks going on are, unfortunately, indirect talks. If the confidence-building measures of which my hon. Friend the Member for Bury South spoke are adopted, I hope they will lead to direct talks between the Israelis and the Palestinians.

Jeremy Browne: That is a matter that I may wish to bring to the attention of Home Office colleagues. I am sure that they will take my hon. Friend's wider point seriously, and I want to deal with it in the remainder of my speech. It is the importance of not just Government-to-Government or even business-to-business relations, but of engaging on a person-to-person basis with many countries.
	The economic shifts that we are witnessing are no less significant politically. I have already said that after the second world war we had a political settlement, which was essentially the cold war settlement based on Europe and north America. That is emphatically no longer the case. Of course, we must be careful about getting ahead of ourselves. The United States is still the dominant power in the world and likely to remain so for a considerable time. Gross domestic product per capita in the EU is still vastly higher than in China or India. However, the direction of travel is obvious.
	Britain can and should be confident in our ability to succeed in the new order. We remain a respected global player. We are at the core of international decision making: we are a major player in the EU, the Commonwealth, the United Nations and NATO. We have a network of diplomatic and other missions that reaches into every corner of the globe, while maintaining the ability to exercise hard power when necessary.
	Along with Britain's economic and political assets, our so-called soft power can also play an important role in ensuring that we retain our influence and prosperity in future. We are globally influential in subjects ranging from architecture to science and popular culture. We have global sporting connections, including the world's most followed football league. The UK will be at the centre of world sport when the Olympics come to London in 2012 and the Commonwealth games to Glasgow in 2014. We have a unique asset in the BBC World Service, while the British Council connects millions across the globe to Britain's culture and education.
	The changing world order should not be seen just in terms of a GDP league table. As important, if we are to win the debate on important matters such as climate change and human rights, is our ability to lead on ideas. Just as we must lead in that competition of ideas, we must likewise provide leadership in the debate on fundamental values.
	I have spoken in meetings with Foreign Ministers from around the world about not only our economic interests but the balance between the role of the state and the individual, and argued that economic growth was not the only measure of human well-being, but that civil rights were central, too.

John Howell: Let me start by thanking all the hon. Members who made maiden speeches tonight. I suspect that when I came into the House after a by-election colleagues breathed a sigh of relief at the fact that they had only one maiden speech to concentrate on. Tonight we have had three, but they have been three excellent speeches. I particularly welcome a fellow central and east European cold warrior to the Conservative Benches, particularly in the context of this debate.
	It is nice, too, to return to a subject that I left professionally almost a decade ago, when I was the author of the Ernst and Young emerging markets reports. It was a monthly attempt to score key markets for attractiveness, principally from the point of view of foreign direct investment. The big emerging markets of the day were in eastern Europe, which seem still to be the big emerging markets of today, as if nothing had happened. Many are still on the list, despite being members of the European Union. Then, as now, the big enigma was the role of Russia.
	In the intervening decade there seems to have been in the field a long march of taxonomists, who have sought to subdivide emerging markets almost ad infinitum. The  Financial Times divides them into advanced and secondary emerging markets, based on national income. Morgan Stanley divides them into developed, emerging and what it calls frontier markets. There is a core group of markets on which everyone agrees, with a few others, such as Saudi Arabia, around the edges.
	I am not sure that such taxonomy is of any use. What we are still dealing with are industrialising countries with large growth and large potential, accompanied by equally large risk and insecurity. Most of that taxonomy, anyway, is capital markets-driven, but a very different picture often emerges if one looks at those economies not as capital markets, but as markets for foreign direct investment or for export. Indeed, when for a brief while I presented business programmes for BBC World Service television, I visited more emerging countries' stock exchanges than I care to remember. Undoubtedly the smallest but one of the most enthusiastic was that in Mongolia, but we should remember that the Mongolian stock exchange is not there to generate capital for its companies; it is there as a social device for the equitable distribution of newly privatised assets, most of those by means of mass or voucher privatisation, which the UK has sponsored. Inevitably, those are high-risk procedures, but experienced capital-market players can largely cope with such risks.
	A good question is how we define the difference between emerging economies and emerging markets. We are talking about the attractiveness of such economies in business terms, with their export-led focus, use of agents, joint ventures and, indeed, direct investments. In my time as a partner at Ernst and Young, I helped many small and medium-sized enterprises into emerging markets, but we have to be realistic, because one of the biggest constraints on them is the amount of time involved in entering such markets.
	Sadly, the majority of SMEs that came to me for advice came when they were on their last legs in the UK-their markets having disappeared for one reason or another-and they wanted an emerging market and an emerging economy as a means of getting them out of their problems. I am not saying that that cannot be done; it can. The company that I set up with a business partner did so, but it meant that one of us was always on the road, particularly as our first major project was to produce what I can describe only as a pop video of Manmohan Singh, to be shown at an international conference. It was incredibly difficult, because the essential humility of the man meant that his character did not fit into the pop video class. The business meant having to be away for quite a long time and, in a business with two principals, one can imagine the difficulties that arose.
	We need to take a balanced view of individual countries, and to make an assessment that some will need more help than others and more encouragement from Government if they are to export. There is a lot of talk about the emerging economies that are in fashion today and out of fashion tomorrow, but not all of that is based on the objective, analytical criteria of companies such as Morgan Stanley; much of it is based on gut feeling.
	We spoke earlier about one barrier being the difficulty of language, but one that is frequently overlooked is the difficulty of culture. I remember how, at an INSEAD seminar, the most distinguished cultural scientist on the matter, Fons Trompenaars, put forward his view on cultures and how that can help people assess them and do business. His view is based on a number of individual dilemmas that he put to about 15,000 people throughout the world.
	The most famous is known as the dilemma of the car and the pedestrian. Essentially, we are in a car driven by a friend who exceeds the speed limit and knocks down a pedestrian. On the question of the driver's expectation that we will lie for him, the worst place in the world, according to Fons Trompenaars, is Canada, where 96% of people would shop their friends to the police. Emerging markets, however, are some of the best places to have friends: in South Korea, 26% would shop their friends; in Russia, 42% would; and in China, the figure is 48%.
	Those responses should not be taken literally, but they are indicative of how much obligations to the state outweigh obligations to individuals.  [ Interruption. ] The Minister of State, Foreign and Commonwealth Office, the hon. Member for Taunton Deane (Mr Browne) laughs, but Britons figure at 90% on that scale, so the UK is not too good for friendship. Interestingly, however, those questioned in the UK asked how seriously the pedestrian was hurt. If they were more seriously hurt, there was more of an obligation to the state than to the individual. One has only to cross the channel to obtain completely the opposite result, where the more the pedestrian is hurt, the more the driver obtains our assistance in lying, because their punishment would be more severe. That may seem academic, but I recommend the work of Fons Trompenaars to hon. Members; it provides a useful, pragmatic framework for considering emerging markets. For example, it draws out the frequency with which developed countries depend on legal agreements and big contracts.

Alison Seabeck: The hon. Lady is absolutely right, and I concur with that view. Again, however, I will deal that issue in more depth a little later.
	Bills in the south-west are 25% higher than the national average, which over the course of a year equates to £100 more, while for unmetered customers the figure is considerably higher, at almost £300. For people on low or fixed incomes, that can mean a substantial amount of their income. Indeed, for those on the lowest incomes, water bills can take 10% of their incomes. For elderly individuals living alone on a basic pension-we in the south-west have a larger-than-average older demographic- or for lone parents with young children or single people in rented accommodation, water bills present a struggle.
	The Minister will know that the area covered by South West Water is large and diverse, ranging from Cornwall in the far west through to Devon, and taking in parts of Dorset and Somerset. We also have some of the poorest areas of the country. Cornwall is the only area of the country to be in receipt of EU convergence funding-previously known as objective 1 funding-and poverty remains an issue, despite big moves in the right direction over the past 13 years. The Consumer Council for Water has actively campaigned to try to influence price levels in the south-west, and has carried out further, detailed research to try to discover what the bill payers themselves feel should be done to remedy the problem.
	The bill payers whom I have spoken to-I am sure that other hon. Members have had similar conversations-feel that it is unfair and indefensible to expect some of the nation's least well-off families to shoulder the burden of the cost of a system that requires them to pay for the upkeep of beaches that are largely used by wealthier holidaymakers from outside the region who do not pay for the coastline in the south-west. A solution to that long-standing injustice must be found. Many of my constituents have already lost patience with the process. A recent letter from one elderly constituent from St Budeaux expressed utter exasperation at the lack of transparency in how the costs are apportioned.
	In acknowledgement of the problem, the previous Government set up the Walker review to examine the case surrounding water charges. Anna Walker was asked, among other things, to examine the current system of charging households for water and sewerage, and to assess both the effectiveness and fairness of the current and alternative methods of charging, and the link to affordability. Anna Walker delivered her extremely thorough report last year, having toured the country and visited the south-west and Plymouth on more than one occasion. The report acknowledged for the first time what most of us knew: that the long-standing high charges in the south-west were a direct result of the privatisation in 1989.
	Anna Walker also suggested that the options for tackling the root causes should include a specific one-off adjustment, estimated at around £650 million, to pay off South West Water's debt, or annual transfers either from the Government-I suspect that this is unlikely in the current economic climate-or from other water customers around England and Wales. That would not be popular either, because Thames Water customers are financing the Thames tideway project around the city, and water shortage issues have a significant future cost in a number of other areas.
	A further alternative would be to rely on a package of proposals targeting specific groups of South West Water customers, perhaps through a series of measures such as the use of a seasonal tariff charged for additional summer use. That would pick up second-home users, but also businesses. It could help some residents to achieve a saving of between £40 and £50, but it is not a popular option. It is seen as a tourist tax, and would require compulsory metering, which would also have a cost. I know that the hon. Member for St Ives (Andrew George) is concerned about second-home owners and their potential for benefiting significantly from having meters. He sees that as unfair. Indeed, in a debate on 2 June 2008, he said that metering was
	"a way of rewarding people who should be paying more".-[ Official Report, 2 June 2008; Vol. 476, c. 619.]
	Another option would be the wider use of affordability measures, and South West Water has been quite proactive in trying to identify and assist vulnerable customers in that regard. Such measures could be more widely applied and could deliver around £80 per annum for low-income households. That would have to be linked to water efficiency, however. It is essential to encourage that, not only for economic reasons but because water is becoming an increasingly scarce resource at certain times and in certain areas.
	As a result of this debate, I have received some useful briefings from people on related matters, especially on the re-use of rain water and on building regulations. I suspect that there is a whole new debate to be had on those matters, but I want to put on record my gratitude to the businesses and organisations that have e-mailed me. This flags up just how useful these debates in an often rather empty Chamber can be-it is actually quite full tonight, so thank you to everyone who has stayed.
	Low-income customers with medical conditions could benefit significantly if changes to the current Water Sure scheme, as recommended in the review, were adopted. That would result in it being capped, either at a national average or on a regional basis, whichever is the lower, and would have a redistributive effect within the region, but that in turn would mean that other South West Water customers would pay more, which would probably not have broad support. This is not a straightforward issue, which is partly why I am back here tonight, five years after I secured my first debate on the subject.
	A national levy is another idea that has been put forward. That would have the effect of supporting South West Water bill payers now, but they could well find themselves having to pay for similar schemes in the future, such as additional reservoirs in the Thames Water area or elsewhere in the south of England, for example. The Consumer Council for Water's research suggests that water bill payers would consider that option, and we local MPs certainly need to explore it with our constituents. I appreciate that many of the options would have consequences for bill payers elsewhere, but we must resolve to produce a fairer system that does not penalise low-income families merely for living on a peninsula surrounded by the sea.